Minutes
Webb Creek Utility District
Friday, March 7, 2014
Commissioners Present
Robert Vick, President
Steven McCarter, Vice-President
Delmar Ball, Secretary
In Attendance
Alvin Ford – Utility Employee
Karen Huffaker, Office Manager
Jim Gass – Ogle, Gass & Richardson
Joe Barnes-Barnes Insurance
Anita Valentine-Barnes Insurance
Tripp Shafer-Bent Creek Golf Course
Beth – Bent Creek Golf Village
Donald Wallace, Utility Customer
Meeting Minutes
Item 1 - Determination of a Quorum and Call to Order
With a quorum present, Commissioner Vick called the March 7. 2014, WCUD Board of
Commissioners meeting, held at the district office located at 3625 Lindsey Mill Rd, Gatlinburg, TN
37738, to order at 10:00 a.m.
Item 2 - Approval of Agenda
Commissioner McCarter made a motion to approve the agenda. The motion was seconded by
Commissioner Ball, with all voting in favor of the motion.
Item 3 - Approval of February 7, 2014 Meeting Minutes
Commissioner McCarter made a motion to approve the minutes from last month’s meeting held on
February 7, 2014. The motion was seconded by Commissioner Ball with all voting in favor of the
motion.
Item 4 - Barnes Insurance
Mr. Joe Barnes presented the Utilities renewal of insurance coverage. There was an increase in
premium of $1200.00 per year. Mr. Barnes stated that this rate would not change for the next
three years. He presented the Commissioners along with Mr. Ogle and Ms. Huffaker a copy of
property schedule and the amounts of coverage on each item. He stated if the Utility would like to
go over amounts and if thought any coverage amounts needed to be changed to let them know and
they could change. Mr. Barnes went over the “pollution clean-up coverage” that is included in the
policy.
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Mr. Alvin Ford suggested we check content coverage and covered amounts. Mr. Barnes said if any
questions or changes to call and let them know. Ms. Valentine said to use the list provided and
write in any changes and send a signed copy to them and they would take care of any changes
requested.
Mr. Barnes explained when going through list the best way to think of contents is “anything that
can be picked up and physically removed. Ms. Valentine explained that replacement costs means
the Utility would be provided the amount to replace covered items at what the item is new, not
depreciated for how old it is.
Ms. Valentine also addressed the issue of Commissioner McCarter needing to fill out a form to
exclude himself from worker’s compensation insurance coverage. She explained that Commissioner
Vick and Commissioner Ball were already excluded. Commissioner McCarter filled out the form and
returned it to Ms. Valentine.
Commissioner Vick made a motion that the Utility renew our policy with Barnes Insurance for the
next year. The motion was seconded by Commissioner Ball, with all voting in favor of the motion.
Item 5 - Bent Creek Golf Course
Tripp Shafer from Bent Creek Golf Club stated the golf course wants to tie into the Utility’s water
instead of using their well. Alvin Ford explained that what the golf club had requested a tap and
was interested in tying the pro-shop, the Creek Side Grill, the golf maintenance building and the
snack bar onto the Utilities water. This would be four different units. Mr. Ford stated that the
initial plan was to set a meter at the well house and then disconnect line from well house and
connect to our meter.
Mr. Shafer expressed that due to the age and problems that already exist with the present lines that
are hooked onto the well, he would like to connect on at the line that is near one of the buildings
where the pipe goes under the road to completely get away from these old existing lines from the
well. Mr. Ford explained that although this could be physically done, the issue here has to do with
the fact that this point is after the water passes through Bent Creek’s meter and becomes Bent
Creek’s private distribution lines. The only way this could even be a possibility is if Bent Creek Golf
Village and Bent Creek Golf Course had an agreement amongst themselves on not only tapping in
from Bent Creek’s line but also on billing.
Beth Conaster from Bent Creek Golf Village was here as their representative. She stated that she
and Mr. Shafer had hoped Mr. Gary McGill, the Utility’s engineer, would be at the meeting today
because they wanted to hear his option on the best way to go about this. Mr. Conaster also stated
that the parent company, Diamond Resorts International, is a separate entity and has nothing to do
with the golf course.
Jim Gass stated that once the water passed through the meter and became Bent Creek’s water it
would become a legal issue for the golf course to become a customer of the Utility. He stated the
simplest thing to do would be for the golf course to come off the Utility’s main line. Commissioner
Vick stated that at this point it was a definite that we could go this route. Mr. Gass also asked Ms.
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Costner if her company has an objection with granting the golf course an easement to cross their
property. Ms. Costner said they did not, considering the fact that the golf course is leased from
Diamond Resorts and therefore any improvements made by the golf course would be beneficial to
her company as well. With this being said, her company would like to have every avenue possible in
regards to costs before they went to the Homeowners Assoc. This way they could compare the
price and if not much difference without Bent Creek Village becoming involved, then why bother to
go this route.
After much discussion, it was decided that the Utility would ask Mr. Gary McGill to come out and
access the situation and give the Utility and both Mr. Shafer and Mrs. Costner his option on the best
way to move forward.
Item 6 - District Manager’s Report – Johnny Ogle
Mr. Ogle is not present today and his report is being presented by Alvin Ford.
Mr. Ford reported a water loss of 629,000 gallons. The Utility had one leak that was fixed that
actually overlapped from last month.
The Emergency Plan and the SOP are in the process of being updated. All backflow devices have
been tested for the year and repaired if necessary.
Mr. Ford discussed the brass and copper inventory discussed last meeting has been removed and
replaced with new inventory. The old materials have not yet been disposed of and will be taken as
scrap metal.
Item 7 - Karen Huffaker- Office Manager
Ms. Huffaker noted that the bank balance sheet as of today, February bank statement, income
statements for end of year 2013 and January 2014, copy of Visa statement, and a copy of Adjustments
made for the month of February were included in the Commissioner’s folders.
Ms. Huffaker reported that all 2013 minutes are now posted on the Utility’s website.
In regards to changes to be made in the Utility’s “Customer Contract” that will address the problem of
customers who rent property and leave without paying their water bill. With the advice of Mr. Jim Gass,
it was decided that the property’s owner would be responsible for any unpaid bills before the service
can continue either in the owner’s name or next renter’s name. To accomplish this change the Utility’s
“Customer Contract” will need to also be signed by the property owner along with the renter. A motion
for this change was made by Commissioner Ball and seconded by Commissioner McCarter with all voting
in favor of the motion.
Commissioner Vick stated that in his opinion Ms. Huffacker had done a good job on completing training
in MAS 90 and he was comfortable with the financial statements next month we should formally add
“Approval of Financial Statements” to the meeting agenda.
Item 8 - Jim Gass – Ogle, Gass & Richardson
Mr. Gass updated the Board on UMRB final hearing that is scheduled for April 3, 2014. He expressed
that although from the beginning the UMRB had suggested that a resolution be reached between the
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Utility and Bent Creek. Bent Creek’s experts had requested three past year audits that were sent by Ms.
Huffacker. Bent Creek has also been given a memo prepared by Bart Kreps, of Raftelis, with input from
Mr. McGill showing the impact on rates if the Utility were to change the way it bills Bent Creek. Mr.
Gass stated that Bent Creek attorney says they want to resolve but has yet to see a proposal that would
allow the Utility still meets its cost and resolves their issues. Mr. McGill stated that if a proposal was
sent to him, he would contact Ms. Huffaker and schedule an executive session to discuss litigation.
Mr. Gass stated that he, Gary McGill, Bart Krepps, and Commissioner Vick all should plan on attending
the April UMRB meeting. Mr. McGill may testify or give presentation on the data that was given to
Raftelis. Mr. Kreps will qualify his rate analysis and why rates are recommended to be set as they have
been by the Board of Commissioners. Mr. Gass will outline this information for the UMRB. The UMRB
will then hear Bent Creek’s experts which will state why they do not believe the rates should be what
they are and, lastly, the UMRB will give their decision.
Item 9. - Robert Vick- President
Commissioner Vick reported that he has read over the preliminary 2012 audit that was sent to the Utility
and if any of the Commissioners would like a copy, they can get it from Karen. Pugh is saying they did
not get accurate enough records and they are not standing behind the accuracy representation and said
that the State would accept an audit with a “disclaimer of opinion”. Mr. Gass stated they had told him
the same thing and had asked him to expand on the letter he writes every year that goes along with the
audit, concerning any kind of litigation or lawsuits, if there are any or not, to include the possible
process and question that still looms over the audit based on actions from the Comptroller’s office and
Board action with other employees. Mr. Gass stated this letter has not been finalized but was in
progress.
Commissioner Vick stated that the actual numbers in the preliminary audit, which are not likely to
change, show a turnaround from a $154,000.00 loss in 2011, to a $32,000.00 increase in 2012. Mr. Gass
will respond with his statements to the UMRB, and the “management letter”, normally written by Pugh.
Jim will have these two items together by next meeting so the audit can be sent to the Comptroller’s
office. This should hopefully get the Utility off the “distressed utility district list”. This will also help
Mitchell and Hill to begin the 2013 audit. Commissioner Vick stated that Richard Hill had requested a
2013 depreciation list.
Commissioner Vick discussed change in the Utility’s Blue Cross and Blue Shield health plan. As of March
1. 2014 the plan became a co-pay plan that will no longer involve an HRA. The change could take at least
a month to straighten out and finish with the HRA.
Commissioner Vick suggested that Johnny Ogle, who is interim district manager, be asked to take the
district manager position permanently. He also stated that by next meeting we will hopefully be ready
to take care of this because the Utility needs a District Manager in place.
Item 10 - Steven McCarter –Vice-President
Commissioner McCarter went over changes made to the Utility’s policies #7, 16, 19, 25. After some
discussion, a motion was made by Commissioner Ball to approve these changes. The motion was
seconded by Commissioner McCarter, with all voting in favor of the motion.
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Item 11 - Delmar Ball – Secretary
Commissioner Ball had no report.
12. Unfinished/New Business
None
13. Adjournment
Commissioner Ball made a motion to adjourn. Motion was seconded by Commissioner Vick, with all
voting in favor of the motion.
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